Diversification helps some in New Jersey combat recession

05/26/2009 02:41:03 PM
Abraham Mahshie

While the recession is hurting the foodservice sector, some New Jersey fresh produce suppliers are quickly diversifying their offerings or providing creative alternatives to keep orders steady this summer.

“Many of our competitors perhaps are struggling because they don’t add value and they are not as innovative in their product mix,” said Jim Donio, treasurer for Frank Donio Inc., Hammonton, N.J.

“Services like pooled packaging material, pooled branding labeling so that we give our growers we’re partnering with some added value under our Top Crop label because it creates awareness.”

Sam Pipitone, president of F&S Produce Co., Rosenhayn, N.J., said sales are actually up with existing customers. “That’s a contradiction to everything you hear, but that is so.”

Pipitone said F&S Produce is a little more diverse that a lot of other fresh-cut suppliers.

“We have a lot of items we’ve done for a long time,” he said of the diced vegetables including celery, onions and peppers that the supplier provides to help cooks. “There’s a big increase on those because a lot of people are cooking more now, or cooking for the first time.”

For budget-minded consumers looking to spend $20 on a meal for four, Pipitone said buying some F&S Produce items for salad or a fresh fruit dessert can help “save a lot of money.”

Bill Nardelli, president of Nardelli Bros. Inc., Cedarville, N.J., said Nardelli Bros. has diversified its business with retailers, wholesalers and processed customers.

“We can shift our commodities back and forth and our product lines are interchangeable,” he said. “If the fresh-cut is off a little, we can switch to retailers or foodservice. Foodservice is off a little bit because of fewer people eating at restaurants.”

Nonetheless, Tom Sheppard, president of Eastern Fresh Growers Inc., Cedarville, said nobody is cutting back yet.

“We do contract with salad companies. We do have the advantage over California because of freight prices,” he said. “It is still an advantage, but not as much. It’s still significant.”

Sheppard said contracts are consistent with last year and in some cases, there have been post-contract increases.

“Our contracts are pretty much the same as they were, and they are living up to them a little bit more,” he said.

“If they had 10 loads contracted, they will take the 10 and one or two more sometimes. We haven’t had a problem where it’s been hurting.”

Jim Donio, treasurer for Frank Donio Inc., Hammonton, N.J., said the key is providing more value-added products and specialty packs for the products, especially when demand for fresh, locally grown produce is high on consumer minds.

“For example, corn in bags, bins, however they like it picked fresh that day — diverse packing, fresh and delivered into their stores within 24-48 hours,” he said.

“That creates that farm stand feel that chains are constantly striving for, but it does it in a cost-effective and efficient way and it does it on a scale and a volume that we can serve the large national retailers.”

Donio stressed that Frank Donio Inc.’s customer service and relationship with merchandising staffs is what helped make the company a stable force despite the recession.

“If we can partner with them through the 12 months of the year, then when times get tough, when, example, any particular crop is very difficult to get or in tight supply, we’ll be there for them,” he said.

Kurt Alstede, general manager for Alstede Farms LLC, Chester, N.J., has found his niche to be especially lucrative as families look to save money on expensive vacations by finding fun things to do closer to home.

“We’re a little bit unique because we’re only 40 miles west of New York city and everything we produce is retailed at a store open year round on our farm, 19 urban tailgate markets and an expansive pick-your-own business,” he said.

“Also, it’s an alternative to an expensive vacation — an agri-vacation with hay market rides, birthday parties, pony rides, an ice cream parlor, and we serve hot food.”

Donio said high food safety and sustainability standards also provides an added value in the eyes of their customers. Donio explained the more closely a company can work with growers and retailers in a cooperative way to stay ahead of state and federal regulations, the greater value they can provide to their produce.



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